One thing you should know about purchasing real estate is that you're going to find it to be a very pricey transaction. There's nothing cheap about buying real estate and if you haven't been saving up money for a long period of time you might not end up being able to afford the home of your dreams.
While you do have the option of applying for a mortgage that will help you pay for your property you will still be required to come up with your own funds to cover the down payment cost. For those of you inexperienced in the ways of buying real estate a down payment is an amount of money paid upfront that is a percentage of the total purchase price to help finalize the deal.
In the world of real estate a down payment amount is typically anywhere from 5 to 20% of the final purchase price, so if you agree to purchase a condo for example; condos that cost $100,000 your down payment amount would be between $5,000 to $20,000. For some people that's a lot of money and can be hard to come by, while for others it's not a whole lot and they can afford to make such a payment. There's a reason why many people say that you should have at least $20,000 saved up before you even start looking at available real estate properties for sale.
Just know that whether or not you have that much money saved up or tied up in investments, in many cases you cannot buy without making a down payment. Financial lenders rely on down payments as a sign of good faith on the part of the borrower that they will be able to make their mortgage payment. If a mortgage is granted on the provision that a down payment has been made then it's less likely the borrower will default on their loan and if for whatever reason that were to happen they wouldn't have to give back the down payment, as it's a form of collateral.
The amount can influence the amount of money you can afford to spend on a real estate property and the amount of your mortgage payment and its monthly amount. So, if you know you can afford a down payment amount of $30,000 you would be able to at least afford a home with a purchase price between $180,000 t0 $600,000. Of course, the bigger the down payment you make the lower your mortgage will be and the less you would have to pay each month. Talk to your mortgage lender to figure out your monetary requirement before you get your home search underway! If you would like to get a fast idea of what type of down payment you may have in your future, you can click here. If you are visiting our site but live in Canada, Ratehub.ca has an online calculator to help you out. Before using a down payment calculator you need to be able to enter the asking or purchase price of the property. So if you found the ideal home, your first step would be to enter the asking price, followed by the the amortization period. The minimum down payment required in Canada for example, is 5%, though most banks and even interested buyers aim for 20%.